COVID19 Hit ThyssenKrupp to Cut 11,000 Jobs
components businesses in particular suffered from the slump in demand from the automotive industry and other sectors. As customer’s restarted production, business increasingly stabilized between July and September. For the 2019/2020 fiscal year to September 30 ThyssenKrupp reports order intake of EUR 28.2 billion, down 17 percent year-on-year. Sales decreased by 15 percent to EUR 28.9 billion. At minus EUR 1.6 billion, adjusted EBIT was as expected lower than a year earlier of minus EUR 110 million. ThyssenKrupp AG Chief Executive Officer Ms Martina Merz said “The coronavirus pandemic is a massive stress test for thyssenkrupp. Our top priority remains the protection of our employees and our businesses. Despite the headwind, we have achieved important milestones in the transformation of the group. In particular, our strengthened balance sheet gives us the flexibility to systematically implement further necessary steps in our plan for the future of thyssenkrupp. But: we’re not yet where we need to be. The next steps could be more painful than the previous ones. But we will have to take them.”
In parallel with the immediate coronavirus measures, thyssenkrupp made further progress with the transformation of the company in the past fiscal year. The elevator business was successfully sold, significantly strengthening the company’s balance sheet. In addition, extensive restructurings were initiated – for example at System Engineering, Springs & Stabilizers and the cement plant and aerospace businesses. In the steel business, too, extensive restructurings have been underway since spring. To address the specific market situation and counter the effects of coronavirus, adjustments to the execution of the Steel Strategy 20-30 and also further cost reductions are currently being worked on.
In May 2019 the company announced a reduction of 6,000 jobs over three years necessary for the transformation of the group. As a result of the restructurings begun and implemented in the past year, around 3,600 jobs have already been cut. To address long-term market developments and the effects of coronavirus, thyssenkrupp currently sees the need for a further reduction of altogether 11,000 jobs, measured against the starting situation. These additional 7,400 jobs are to be reduced over the next three years.
To tackle the structural challenges in the steel business and push ahead with the transformation to green steel, thyssenkrupp is exploring various competing options. A fundamental decision on the steel business is expected to be made in spring 2021.